When One Partner Won’t Budget

In my last article at Get Rich Slowly, I gave the background on my income and expenses. My husband’s income and expenses are a little more difficult to compile. For one, Jake left the life of a steady paycheck about a year ago in order to start his own business. This means that his income fluctuates, which of course we knew going in. It also means that the first few years he’s going to make much less than we hope he will eventually. We also knew that going in.

However, another major factor is that Jake’s idea of budgeting is “make so much money it doesn’t matter what you spend because you can afford it all.” When he started working at The Big Firm right out of law school and was making $90,000 a year, this was something that was more or less possible, especially since he was working 80+ hours a week and didn’t accumulate vacation or sick time. He didn’t have time for anything really spend-y. However, even though he’s now living the entrepreneur’s life, he’s resistant to budgeting. Earlier this week I sent him J.D.’s article about how to budget for an irregular income, and his response was:

This assumes that I actually have a budget…which I do not. I just make however much money I happen to make and pay whatever bills happen to fall due. Perhaps it’s not the best system, but it’s worked well so far.

I suspect that it’s going to take a major crisis or two of his own making before he comes to view things differently. One of the things I’ve learned over the last six years is that he almost never agrees with me the moment when I propose something; however, six months to a year later he’ll suggest it like it was his own idea. Go figure.

Since there’s nothing I can do at this point to convince him without violating the tenets of how to talk to your partner about money, I’m willing to wait. And to keep our finances separate, at a minimum, until we’ve reached a point where we are more in sync.

Even then, like J.D. and Kris, we may opt to continue to keep our finances separate. Interestingly, like J.D., Jake also grew up in a household where access to money was used as a weapon, and Jake is also the spender in our relationship. On the other hand, I don’t recall my parents ever having a single argument about money, and Jake referred to me yesterday as “the most frugal girl he’s ever dated.” In the meantime, though, since his situation does affect me and I have access to his Mint account, I have started compiling his data so it’s ready for him to work with when he comes on board.

Jake’s Irregular Expenses
Unless otherwise noted, the amount listed reflects just his share, even for things like auto insurance that will be joint going forward, since we haven’t combined finances yet. For some categories — like auto expenses, gifts, and healthcare — I’m assuming his costs are about the same as mine until I have data suggesting otherwise. These are annual numbers.

Auto insurance: $840. This is the annual total; he pays $420 every six months in January and July. Similarly, in my recent post when I said my auto insurance was $500, that was also the annual total. I pay about $250 every six months.

Auto expenses (repair/maintenance): $250

Auto registration: $250. Quite a bit more than mine, since his car is 8 years newer (and also much nicer).

Gifts: $1000

Health care (copays, etc): $500. Numerous people said my $1000/year estimate was high, and when I double-checked, I realized that I’d double-counted my massage costs in both the irregular expenses category and the recurring monthly category. This means my actual irregular medical expenses last year were closer to $230. However, I think it’s best to estimate high in this category, and I know Jake has more prescriptions than I do.

Vet expenses (pets): $2300. As noted in my previous breakdown, he would have paid half of this. All three of our pets had dentals last year, and one of the cats had an extraction while the other had some medical issues that had to be resolved before she could go under anesthesia. This category also includes grooming for the dog (a poodle), which runs about $50 per grooming.

Mensa annual dues: $60

Total: $4050

I am sure there are expenses I am missing, and will be filling in this category over time. For example, he recently spent $437.36 on his 30,000 mile check-up, so he’s over my initial estimate. However, not only should he not spend any more this year (knock on wood), I believe that’s the first major repair/maintenance since he bought the car in 2008. And, since he is only driving an average of 7,500 miles/year (and that average should be dropping even more now that he works from home), we fall into the category of “gentle drivers” and these costs should stay relatively low.

Jake’s Regular Expenses
Like the irregular expenses, the amounts listed below reflect only his share for things, even if they are a joint expense. Accordingly, the pet, grocery, Netflix, internet, rent, satellite cable, renters’ insurance, and electricity categories should be doubled if you want to get an idea of our joint/mutual costs. Please also note I solicited more information about his credit cards and have updated the information that originally appeared here. For his payments, however, I am going by what he has paid historically, not what the minimum payment actually is. These are monthly numbers.

Gas, auto: $55

Pet expenses: $50

Grocery/household: $300

Cell phone: $135 (Note: Jake uses his cell phone for the business, too, though I’m not sure if or how he separates it from his personal use.)

Drycleaner: $40

Netflix: $8

Internet: $32.50

Satellite cable: $37

Renters’ insurance: $9

Electricity: fluctuates throughout the year, in summer $100

Withdrawal/cash: unknown, I suspect it varies widely

Charity: $10 (Humane Society)

Haircuts: $18

Rent: $488

Student loan 1: $180

Student loan 2: $70

Student loan 3: $176

Student loan 4: $112

Auto loan: $300

Credit Card 1 ($12,697.64 @ 4.99% for life): $400

Credit Card 2 ($2,202.87 @ 7.5% variable): $200. This is the one in my name.

Credit Card 3 ($2,648.33 @ 3.99% for life): $200

Credit Card 4 ($1,875 @ 0% until 3/6/13): $175. His share of the wedding expenses not covered in advance.

Credit Card 5 ($8,175.51 @ 0% until 9/1/12): $125. A loan to the business to sign up for a year’s subscription to a client-referral service.

Credit Card 6 ($1,350 @ 9.99%): $150. A loan to the business to cover his partner’s expenses when he was short.

Total: $3,370.50

Jake’s Income
Here’s where it gets tricky. Since January he’s paid himself twice per month in amounts varying from $400 to $5,963.98. Based on his disbursements year-to-date, he can expect his gross salary for the year to be $47,577.42. On average, he’s grossing $3,659.80 per month.

On the surface, then, he’s making enough to pay his bills plus a little extra. However, I’m sure he’s spending it all (that is, I expect that eating out and miscellaneous purchases would take us to the limit of his gross salary). I guess this is what he means when he says “it’s worked well so far.” However, he hasn’t been paying quarterly estimated taxes. There are some structural changes to the business that took effect August 1st, and he’s been waiting for that to start his quarterly payments.

Based on my calculations (which I will freely admit are pure guesstimates based more or less on my own withholdings), he can expect to owe approximately $8,840 by the end of the year. This amount should include federal and state income tax, social security, and medicare. Based on his earnings to date, he should have $4,760 set aside for taxes as of this moment. Guess how much is in his savings account right now? $4,194.99. So he’s short of where he should be and since he had been thinking of that as his emergency fund, not his tax fund…well. You see the dilemma.

Where to Go From Here?
Regarding budgeting, my plan is to continue to suggest it and wait for him to catch on before deciding whether to combine finances. He’s never even calculated any of this himself, though I did share the projected tax information with him, which he appreciated. While he freely admits he has no idea when any specific bill is due and is always surprised when they arrive, he also doesn’t see any need to change the system when he’s never been late paying any bill and pays more than the minimum on all his credit cards.

On the positive side, his average disbursement to himself has doubled from about $1,000 to about $2,000, so his business is growing.

What would you do in my situation, if your goal was to end up like this couple? As I mentioned in the comments of my previous post, I refuse to become The Girl Who Only Says No or The Girl Who Only Talks About Money, because that will only poison the well for every aspect of our relationship, not just our finances.

I admire a lot of what J.D. and Kris said in their interview with Redbook, and they had a successful multi-decade marriage and a successful (and much rarer) amicable divorce. So please note I will only consider advice that is both relationship-affirming as well as financially astute!

As much as a hate to say it if he runs his business the way he runs his personal account he is in for a load of trouble. You need to keep good records and have a budget for your business or else it has a very good chance of not succeeding. I worked for a CPA firm and see a lot of businesses die off because they simply don’t know what they bring in versus their expenses and are shocked to see that they’re actually losing money… Hopefully he sees the light soon and everything works out! Best of luck to you in getting him to see it!

Agreed. Its one thing to run your personal financial empire this way, another thing entirely when it’s also your livelihood you are piloting toward destruction.

All that debt and no money for taxes? Wow. His personal philosophy of ‘Deal with it when it comes. No big’ is going to bite him in the @$$. The questions are just when and wether you’re going to let it bite you too.

Yes, this. We have paid quarterly taxes for over a decade and you cannot underpay your quarterly taxes by more than $1K without incurring additional taxes/penalties.

It sounds like your husband really isn’t ready (emotionally or financially) to be self employed successfully. You need to address this NOW, or you are going to be looking at serious unhappiness down the road. I am surprised a license attorney would be so clueless about these issues and penalties. There are lots of place to take a “everything will work out” attitude…dealing with the IRS is not one of those places.

Also, $90K a year is definitely not “Big Law”, nor was it is salary that supported Jake’s spending “at the time”. You guys are swimming in debt (school and consumer) and the self deception in regards to your finances, on both of your parts, is huge.

At some point – both you and Jake need to realize that being able to pay your monthly nut is not being on top on your finances. There is a huge difference between looking at the overall cost as reasonable and justifying the monthly payment as reasonable. You need to really re-examine your viewpoint.

Yes, I was a first year associate at biglaw 12 years ago and made $155k. I’m at a small firm now and we start new associates at $150k. After school, I’m sure $90k felt like a huge amount of money, but it really is easy to spend. My wife makes more than that as a nurse. He needs a reality check.

$90K actually is pretty standard now for a non-specialist first-year associate. These two aren’t old enough, and Jake didn’t stay with the firm long enough, to garner much in the way of increases.

Cannot agree more that Jake thinking that kind of money was “big,” in view of the debt load, was purely delusional.

loading....

156

Jensays:

02 August 2012 at 11:28 am

We’re in a second tier city and big law here is paying about 125K. There are also plenty of in-house lawyers making around that amount with far more years of experience. In-house you’re paying for a much nicer lifestyle — whereas going to big law, it’s agreed that you’ve sold them about 20 of your 24 hours a day.

12 years ago isn’t now!

loading....

188

Jen from Bostonsays:

02 August 2012 at 12:42 pm

I would only expect a lawyer specializing in tax law to know about quarterly payments and penalties…. Just because you’re a lawyer doesn’t mean you know everything. It really depends on what you specialize in…

Honey, your husband really needs to get himself to a CPA STAT!!!!!! Yes, it will cost him money upfront, but it will be money better spent working with a CPA to get himself set up to have the CPA do the monthly books and payroll than money spent on nasty IRS fees and penalties!!!! Or dealing with employees and suppliers angry about the bounced checks they got because the bookkeeping was a mess.

loading....

198

Carasays:

02 August 2012 at 1:10 pm

@Jen: I disagree. I expect a *business owner* to know about quarterly tax payments and IRS penalties. It’s a basic responsibility of owning your own business.

loading....

216

BDsays:

02 August 2012 at 2:48 pm

Cara’s right. Any business owner, even a small “one person business” owner knows about quarterly taxes and IRS penalties. And if they don’t, it only takes a couple years (if that!) for the IRS to notice the mistakes in their taxes, and TELL them what they’re doing wrong.

loading....

275

Jen from Bostonsays:

03 August 2012 at 7:52 am

@Cara – I was responding specifically to someone who thought a lawyer should know all of this. However, they don’t teach you how to run a business in law school, and it’s probably why some law firms have a business manager to take care of the business side of things while the attorneys practice law. Ditto, I think, for doctors.

However, you are right – a business owner should know about this stuff. But, a lot of people start their own businesses without learning everything that is involved.

loading....

282

CAsays:

03 August 2012 at 8:49 am

At the very least, a business owner should be smart enough to get help.

I have a JD and an MBA (and a Mensa membership, if it matters), and I volunteered to help my wife start her small business. It didn’t take long for me to realize that I didn’t know anything about the nuts and bolts of running a business. As such, I have a meeting with an accountant this morning.

loading....

49

getagripsays:

02 August 2012 at 7:39 am

I agree you can’t run a business without some planning. It isn’t a month to month thing. A client pays you $10K, you don’t actually have $10K to spend since you have to seperate that to taxes, costs, etc. to see what you are really making. Additionally, if you are charging a “going rate” you assumed is good, which may be fine initially, without decent records you won’t know if the $10K you charged your client is high, low, okay for either you or the client. This is particularly true if you are paying for outside help and their rates rise but you fail to compensate. Sure, you could push the envelope, and end up making plenty to live on, but you can’t make any real comparisons to determine if it makes sense to hire a partner, or close the business and take a job offer, etc. without knowing your income, costs, and taxes.

I’ve known three people who branched off and started their own professional businesses, and did fine, but in the end the bottom line is they were actually making less actual income working for themselves than they made working where they had been. Two decided to close shop and become employees again, and the third accepted it. But the point is they knew the choice they were making based on decent records.

I agree that he’s going to be in for a world of hurt. Part of the problem was there was actually a third partner for awhile who refused to let them file the firm’s taxes at all (I think because she hasn’t filed her own taxes). So the “structural changes” were removing her from the firm so they could do things right, but that process took a lot longer than they anticipated. I am nervous about what their accountant will say once he has the entire picture.

Good thing she’s gone. I have an ex who was one of 3 partners where one partner was like that, and that ties into the thing I wanted to say:

Since you’re married, your finances can’t ever really be that separate. So it is YOUR BUSINESS to make sure that he is not taking on personal debt or obligations as part of launching his business. I should have put my foot down when my ex wanted me to look over the books (he was contributing unpaid talent, not money – Mr. Shady was the money guy) and shady partner said no, it wasn’t a family issue, it was a business issue and I wasn’t part of the business.

I don’t know how it works in partnerships, but my ex was 1/3 owner of a c-corp that had awful bookkeeping problems (starting with one secretive partner who was doing something shady with the business and his personal taxes) that caused awful cash flow problems, and the other partners thought a good way to solve cash flow problems was to use personal credit cards & IOUs with suppliers. So when it all went bust, shady owner walked free and clear but the two well-meaning owners had debts that were their own personal problem when the company went bankrupt. I know other people this has happened to, because personal credit is so much easier to get than a regular business loan, especially in very small amounts. But it’s important that all the debt & assets be on the business’s books, to minimize risk.

So one lawyer can stop two other lawyers from obeying the law? Then how good can the two other lawyers be? We know that one of them can’t manage to fund his own $1500 expense account. This is ridiculous.

That’s what I was thinking, his personal finance issues are a serious problem, but I am way more concerned with how the busniness is run. Especially if he is propping up the business with personal loans on his credit card, plus loans to prop up his partner. And he hasn’t been paying quarterly taxes? Obviously I don’t have the details of the business finances, but I don’t see this ending well.

Money is a difficult area for many couples so you do need to tread carefully. My husband also doesn’t like to budget. So I do it for us. I pay the bills, I determine the savings, etc. He just doesn’t want to do it, but he realizes that it needs to be done. I think your husband, if he’s honest with himself, knows that it needs to be done too.

I’ve actually been handling the bills since before we were married, only I didn’t really hit a groove until we were a few years into our marriage. Before that, we (mostly he) would run up credit card debt because we’d know we couldn’t afford something but buy it anyway. We didn’t ever fight about money, but bill collectors did call.

THe way we really hit our groove was to do one single adult allowance which we keep in a drawer in our kitchen. We can each spend whatever we want from that fund no questions asked. At first I was the only one who noticed the funds so I’d take care to do things like pack us both lunches if things were getting tight. However, as time went by, he began to respect the fund.

It’s worked quite well now for several years. I’m not a spendy person so I didn’t find myself resenting his larger share of the spending. I trusted that he was a good man and would eventually begin to see the wisdom of not spending past the allowance. And he did after a few months of me reporting back how much better we were doing financially.

I think our way might work for you Honey, but it’ll take some tongue holding on your part. He needs to feel like you’re a team in it together.

“This assumes that I actually have a budget…which I do not. I just make however much money I happen to make and pay whatever bills happen to fall due. Perhaps it’s not the best system, but it’s worked well so far.”

I highly doubt that someone who responded with the above statement would agree to get an allowance.
He personally has over a 100k of debt, six credit cards and no savings and thinks his system is working.

I don’t know about that. My husband came to our marriage with that sort of view (and it was true, he simply spent less than he earned and it did work well for him). However, we decided to at least start out with joint accounts for household expenses, and he pretty quickly realized that with different incomes and expenses that required more active budgeting. Now he budgets more and I budget less (you can’t plot and track every purchase obsessively on joint accounts if your partner doesn’t, it kind of turns you into a jerk). Our finances are mostly joint except for a few small individual categories, we trust each other, and it’s all good so far. Compromise is key I guess!

But, he is not spending less than he earns. He financed a college education, financed a wedding, financed his partner, financed a client referral service, had his girlfriend finance something for him ( credit card#2)…
He is not even close to living below or within his means. In this situation his “system” will never work.

loading....

45

Mom of fivesays:

02 August 2012 at 7:22 am

I no longer remember the exact amount, but my husband brought well over 100k in student loans and credit card debt to our marriage – I know it was much closer to 200k. I do think the quote you’ve highlighted is the kind of thing he’d have said, but really, what he meant and felt was, “I’m overwhelmed.” And for us the fix was for me to just handle it. He’s not a stupid or selfish person and he really did want to be financially secure – he just couldn’t see how to go about it.

How long have you been married and how long did it take you to pay off 200k of student loan and credit card debt after you took over the finances?
What are some of the techniques you used to pay off your debt and raise five kids?
That is quit an accomplishment.

loading....

80

Honey Smithsays:

02 August 2012 at 8:55 am

Yeah, mom of five! Submit a reader story, stat. You must have amazing knowledge to share!

loading....

151

Mom of fivesays:

02 August 2012 at 11:11 am

@Maria and @Honey – we’ve been married 17 years and debt free except for mortgage about 9. How did we do it? I wasn’t familiar with the phrase debt snowball at the tme, but the debt snowball is basically what we did. There were so many separate smaller loans and credit cards. The first three years were definitely the hardest financially for us with year number two the most difficult (lots of medical bills and lost income).

I would say the biggest thing we did during the early years was not to increase our lifestyle. We didn’t have cable, our car was 15 years old, and too many other little things for me to remember. The other very fortunate thing for us was that our income steadily increased. The first couple of bills we paid off didn’t really give us breathing room, but they did stop us from incurring more late fees. One day about 4 or 5 years after we were married there was money for cable TV and other lifestyle upgrades.

I didn’t get us out of debt with five kids. We were only at two kids when we became debt free.

I’m also a terrible candidate for a reader story because although I got us out of debt, once we were debt free we just spent our overage (some of it good spending – we adopted kids, we bought cars with cash, but then there’s lots of frittering away that I can’t account for). It’s only the two years or so that I’ve been coming to this blog that I’m starting to really situate us well for the future.

If I could have those freewheeling debt free years of ours back, I would pay much better attention to where all our money was going. The only things we did right those years was to max our retirement and not get back into debt.

loading....

169

Laurasays:

02 August 2012 at 11:57 am

Mom of 5: you may not think you’re a good candidate for a story, but I got a lot out of your small version here. I appreciate (very much!) the fact that you aren’t perfect, that you didn’t do everything right and hop the PF train without ever looking back. When I read stories from people who “came to Jesus” as it were in regards to PF, it seems like most of them are, “I saw the Light, I immediately did everything right, and now I’m free, you can do it too but you have to immediately do everything right too or you failed.” It helps to read your story because it reminds me that even if I don’t have it perfect, I can still make it. Thanks.

loading....

3

Evesays:

02 August 2012 at 4:28 am

Just making sure you did get his permission before publishing all this personal data?

That was my first thought too! Though perhaps agreeing to publish his data is a sign he’s open to advice?

I have to admit this post makes me a little uncomfortable. I enjoy the “help a reader” type posts – but “help a writer”? I do hope Honey gets some good tips, and I’m sure they’ll be useful to some readers.

agree, this definitely should have been a “help a reader”
Honey has written 4 articles (?) now and all have been asking for help. Nothing pertains to a situation where a writer is offering advice or knowledge to the readers.

I think it’s interesting. Frankly, there’s only so much advice a personal finance blog can get. At a certain point, the most interesting and educational thing is the intersection of finance with human fragility and irrationality (something we all have to deal with, no matter how rational we think we are). Not everything needs to be a didactic lesson; sometimes reading just about somebody else’s experience can clarify your own in a much more important way.

loading....

30

Amandasays:

02 August 2012 at 6:14 am

Honey doesn’t want help. She doesn’t take any advice offered.

loading....

41

SweetCoffeesays:

02 August 2012 at 6:57 am

I appreciate reading writer’s stories that ask for help because they [Honey in this case] can write and express themselves well. When Honey asks for advice, I sometimes feel like she’s asking for me (hey, I want to know that too!). Also, when I read the multitude of comments from the awesome reader base, I usually glean useful advice.

loading....

81

katesays:

02 August 2012 at 8:55 am

i don’t think it’s entirely fair to say that honey isn’t interested in taking any advice.

it appears that she is laying the groundwork for what will hopefully be the start of a well-documented, successful, albeit long, journey to becoming debt-free. she’s taken a few articles to outline where she and her husband are currently. i would imagine over the next few weeks we see articles about her starting a budget, prioritizing her expenses, what lifestyle changes she is making to free up more money to pay down her debts, and eventually the success of paying off the first credit card.

most people acknowledge that big changes don’t happen overnight; they are part of a long process. so to pile on her now and say she’s not making progress yet is a bit premature.

if, in a few months, there aren’t some significant changes, then it’s a different story.

loading....

185

Carlasays:

02 August 2012 at 12:35 pm

This is a lesson for me in what NOT to do should I get remarried.

loading....

34

Audreysays:

02 August 2012 at 6:25 am

This makes me uncomfortable too. I hope that after these “what would you do in my situation?” posts that she starts writing about what’s she and her husband are actually doing.

I think you nailed it there At first I kind of felt like this was the blog version of reality TV — someone being paid to air out their dirty laundry, so to speak. Then I sat back and really thought about what it would mean to put so much personal information out there and realized no amount of money could make me do that! Kudos to Honey — it takes a lot of guts!

I’m interested in seeing the direction her writing will take now that she’s laid the groundwork. If we GRS readers can help her with her journey, then all the better.

loading....

46

Rosays:

02 August 2012 at 7:30 am

I hated the “help the writer” aspect at first, but it’s sort of become like a trainwreck I can’t look away from now. I do hope she has her husband’s permisission to disclose so much. I’m usually a “one family, onn pot of money” kind of person, but in this case, I think she shold keep her finances seperate.

Where it’s coming from, I think, is that reader’s have been requesting more writers that are “just starting” on the path to financial stability and success. This stops the site being written by a bunch of people who already know everything.

OK, that’s a relief. However, I am still stunned at the situation you are permitting yourself to be in. That said, try approaching him with a word other than “budget” such as maybe “spend plan”. For people (like my own husband) who views words like “budget” as paternalistic and controlling, a phrase like “spend plan” was more acceptable (even though it is basically the exact same thing…)

My husband also likes seeing the “middle line” of the spreadsheet (not the top/bottom line) which is basically money that he and I have, free of any obligations, that we can really spend as we choose. Some months, that line is smaller than other months (such as when the kids go back to school, and our grocery budget increases in order to pack lunches).

Generally speaking, though, as long as there is something over $200 on the middle-line, he is perfectly fine with the way I’m tracking/organizing things.

i think the phrase for a small business person is “cash flow management plan” (or projection but for too many people that’s like saying “daydream”)

loading....

189

Evesays:

02 August 2012 at 12:44 pm

That’s good. I hope that he is then listening to those who react with horror when they hear his it-all-comes-out-in-the-wash “strategy” of money management! Maybe your experience here can help him also.

Since I’m responding here, I’d also like to register that I’m really bothered by the fact that people are leaping right in and predicting that, because your husband currently sucks as a money manager (let’s admit it, he does), your marriage is doomed. Marriages are made of more than money; you guys are young and will change and grow; and, most importantly, your relationship is none of our damn business. Please go forth and enjoy being married to your flaky husband, if this is your heart’s desire. And then just keep plugging away at the budget thing.

I think she made her relationship our business when she voluntarily posted this article and voluntarily asked us for “relationship-affirming” financial advice. I’m not in Mensa or anything but I don’t see any other way to take that.

I tried, I really did try to come up with something from experiences, education, etc that would offer some sort of concrete advise and I’ve got nothing. All I can come up with is a “defense” strategy.
If this is truly the man you want to spend the rest of your life with I guess just keep your finances separate, DO NOT incur ANY JOINT debt with him..NOTHING!( including a mortgage), keep paying down your debt. Save a SMALL amount for emergency.
I just do not see this marriage working out. If I were Honey, I would put ALL my extra money into paying off HER debt and not worry about saving too much. Since half of any assets she accumulates post marriage most likely could be lost in a divorce. Tell DH you will not be contributing to the cost of cable, satellite, internet, eating out,pet expenses or groceries above 150 a month. YOu just can’t afford it and if he wants to keep them he will have to pay the full amount.
Drop your Mensa dues, you said they were most likely for networking for your husbands new business. Let him pay is own dues and do his own networking. Good Luck.

Keeping finances separate is a common way of limiting liability, many business owners put the house in the name of the spouse for this reason. You guys don’t have a house, and law firms don’t usually have to worry as much about liability, but I would still keep things very separate as a defensive measure.

and speaking of liability … where the heck is Jake’s business insurance expense? If he doesn’t HAVE business insurance he needs it.

Because: he has terrible money problems and bad money habits, and those two things lead to impulsive behavior, which leads to business problems, which leads to work being done not to the client’s satisfaction, which leads to lawsuits. Jeez.

loading....

5

Harrysays:

02 August 2012 at 4:58 am

Pet peeve of mine: people who separately list their Mensa dues on their budgets, just call it annual dues/subscriptions, no one cares that you are a member. Similar pet peeve is describing student loan debt as “ivy league”.

All our student debt is “state U,” and while our Mensa membership won’t come up for renewal until April, I am thinking I don’t get utility out of it that’s comparable to what I pay in. I only joined in the first place because it was my mom’s lifelong wish to join, but we lived in a really rural area hundreds of miles from a testing location for many years and by the time we lived in a more urban area she literally couldn’t hold a pencil anymore. For me, it was a way of honoring her memory.

Oh, that’s really sweet, Honey… And a little sad. Perhaps, as a way to still honor your mother, you can donate a portion of what you’d pay to Mensa to a charity in her name? Did she have any special causes that she cared about, e.g., ASPCA, cancer research, etc.?

Honey, I can almost guarantee that there will be a charity that works on her disease, or on many diseases including hers. Donating or volunteering in her name would be a lovely thing to do. Look up the charity’s finances on http://www.guidestar.org/ (it’s free) to make sure they’re handling *their* finances to your satisfaction. Even $10 will help will help them, so don’t go overboard. Keep the donation low and offer to donate your time instead. You like to write – maybe you can edit their newsletter or help with grant applications. Maybe you have other skills they could use. I have worked in nonprofit for many years and I can tell you that a good volunteer is hard to find. Your time may even be valued more than your money, and you can put that money towards your debt.

And while I’m writing, I want to suggest that instead of asking your husband to budget, you instead talk about when you want to be debt-free, or when you want to buy a house, or some other big goal. Once you figure out that time horizon, then do the math backwards, and figure out that in order to reach your goal, you need to be paying $xxx towards your debt each month. Then, set up a recurring payment from your bank account for the debt (if this can’t be done, then open a new, separate bank account for debt repayment and funnel the money in there) and pay that out before paying for cable or groceries. After you set aside debt repayment money, then buy the necessities, and then you and he can spend whatever is leftover, which may not be much. A big advantage is that you can do something visual with this – plot a graph that shows your debt repayment schedule to reach your goal, and mark your progress on it. It will take some time, but as the months and years pass, you will literally be able to see that you’re on your way towards reaching your goal of being debt-free/buying a house/whatever.

Good luck!

loading....

327

Honey Smithsays:

24 August 2012 at 1:20 pm

So I looked this up. There was one 501(c)3 in the US devoted to her disease, but it was disbanded in 2005. The only other charities in existence are based in Australia (as there is a population there that has this dominantly-inherited disease). Those organizations, however, focus on improving the quality of life of those who have it, not on research (which is what I’d prefer to support).

So, no go on that one. It’s SUPER rare. Most doctors haven’t heard of it.

Honey, if you can’t find an organization devoted to that particular disease, here are a few other ideas:
1) Look for a rare diseases organization that includes that one. There are quite a few out there that focus on groups of rare diseases.
2) Look at related disease organizations to see if they are including it. For example, I know of a Multiple Sclerosis organization that does research into related diseases such as NMO as well, because the work is mutually beneficial to both communities. Contributions can be given to support just the NMO portion of the research.
3) Find a related disease organization and suggest that they incorporate this kind of work.
4) Contact medical practices that treat patients with this disease and ask them about current research and who you can support.
5) See if a university is doing research on that disease. If so, you can give a contribution that is directed at that particular research and by law (in the U.S.) they must spend it on that.
6) Start a separate bank account to save money towards this purpose. It might start small, but after a while, you could have enough to start a foundation and get others involved.
7) If you’re willing to make it public, considering announcing on GRS and everyplace else you write what the disease is. Eventually you’ll find others who have it and together you can find or start an organization.

This is just off the top of my head as someone who used to work in a disease research nonprofit, but I’m sure there’s a lot that I’m not thinking of at the moment.

See if DH can find some free CLEs (California offers a lot of free “bias” and “ethics” CLEs every month) or maybe he can start teaching some CLEs. I also look for “deals” (CLEs that are under $35 and only if I think the course will be really, really helpful for me in the area of law I practice). I’ve only spent $100 on 23 credits worth of CLEs this year by using these three methods.

According to the AZ Bar website:

How much credit do attorneys receive for teaching?

If the presentation is accompanied by original written materials prepared, or augmented – the speaker may earn teaching credit as follows:

For the original presentation: First hour of presentation x 6 = total credit hours
Additional hours of presentation x 2 = total credit hours.

If the presentation is not accompanied by original written materials, the speaker earns one credit hour for each hour of presentation.

What other business expenses does DH have for his business? Does he subscribe to Lexis or Westlaw? Make sure he’s keeping track of ALL of his business expenses so he can deduct them. Also, I REALLY hope your husband and his partner have organized their firm as a Professional Corp., S-Corp, LLC or ANY entity form that limits his personal liability.

Finally, see if you can get on a family plan for your cell phones. I’m on a Tmobile plan with a family member and get unlimited everything for $50/month. $135/month for a cell phone is beyond ridiculous.

I have loads of debt too (awful spending habits as an undergrad and then expensive law degree) so I get feeling soul-crushingly overwhelmed on a constant basis, but he is just making awful choices and there’s no excuse. I work long hours too and am seriously underpaid (such is the legal market right now) and, for me, that’s even more of a reason to change my habits now so that I stop bleeding money and alleviate some of the feelings stemming from my debt load.

His company (a PLLC) has been paying his bar dues. He hasn’t had to do CLE’s yet because you can carry forward if you go over, and he did so many CLE’s when he was at Big Horrible Firm just to get out of the office (and because they paid for them) that he’s good to go for now. In fact, he was going to do a CLE about a month ago because he thought he was short, but when he logged into the system he had more than enough. His company also pays for his malpractice insurance.

Teaching CLE’s is a good idea (I could suggest that he teach a CLE about “How To Create a Business Plan and Start a Boutique Firm” and then he’d have to do it!).

loading....

6

AMWsays:

02 August 2012 at 5:06 am

While everyone has to deal with their money in a way that makes sense for their family, I have never come across a family with children where the separate finances worked. So while this is working for you now, have you discussed how this will work if you have children, or someone loses a job, or becomes disabled?

My husband and I were not on the same page about money when we first got married 24 years ago. He came from a family who, while not rich, never had any lack. My family scrimped and saved and made do. It was hard for me to get him to understand delayed gratification and doing without. What finally worked for me was putting it in black and white. After seeing 2 years worth of ledgers (there were no excell spread sheets back then) it became a math problem and not a matter of trying to convince him that my way was better. Once he saw it on paper, he saw the light. At that point I handed the day to day bill paying over to him. Having to confront it on a regular basis helped keep the reality in front of him and we’ve been a great team ever since. I have full knowledge of all accounts, have 1/2 the burden in decision making on savings and investments, and mostly charged with staying within the household budget.

Another thing that worked for us early on: If you find that your financial “discussions” are getting a little too loud, we would have ‘board meetings’ in a public place over a cup of coffee. It kept our volume in check and kept a discussion from turning into a fight.

Been married 24 years and about 3 years ago we decided to open a 2nd checking account so that we (basically) have separate accounts. We found that it actually helps us meet all our financial goals more easily. We still pay all our bills out of the original account (mine) and he transfers a large amount into that each time he gets paid.

It’s made us more aware of what we have “left”. It has eliminated the chance for any surprises….for example I pay a large bill and he makes a larger than normal expenditure at the same time.

Our finances are combined, but we operate separately in regard to disposable income (all our savings and retirement come out off the top anyway). Neither of us uses credit cards.

I suppose that’s not really as “separate” as the name implies after all.

I would say that in most cases, combined finances are the way to go. However, separate accounts can work as well.

I’ve been married a little over 8 years and we’ve always had separate accounts. We both added each other to our accounts in case of emergency, but we otherwise run them like we did before. For my wife, she likes the feeling of independence and I respect that.

I believe that the reason it works for us is constant communication. Also, neither of us are big spenders and we have similar views on money. We just split the bills up and it’s just not a problem.

Hi Honey!
My one piece of advice comes from some personal experience as the spouse of a new business owner. When my (now ex) husband started consulting on the side, he did not pay quarterly taxes and I could not convince him to. In addition to living outside of our means, and being unable to have good productive conversations about money, the taxes became a huge problem for us. When we first separated in late 2008, the tax bill was the most contentious item we had (I resented it) to discuss and in 2012 he is still making payments for a tax burden that began in the late 90′s/early 2000′s. The mediator asked me why I hadn’t filed taxes separately, and honestly the thought had never occurred to me then and I wish it had. Clearly, we had much bigger problems, but I do wish I had understood that I could have filed separately and not just gone along with his game plan, which was to do nothing and ignore the problem. As a result I was also doing nothing and it cost me financially and emotionally.
I now file the moment I get my w-2′s! I am also about 6 months from being debt free through following my own financial plan and staying focused on my own path. I have tons of regrets about the past and wish that I had done more thinking about my future from a standpoint of what was best for me, not from a place of fear of rocking the boat or simply engaging in the hard conversations.

Effectively, there are two major reasons (and one minor) to file Married Filing Separately on the Federal Forms

1. You’re already going through a separation or divorce
2. You don’t like how your spouse handles their taxes and don’t want to be liable for it later.

(3. The minor reason: your incomes are so disparate that you may actually qualify for some tax break you wouldn’t otherwise receive jointly, though I think this is exceedingly rare and could disqualify you for other tax incentives.)

He needs to be earning $44,490 AFTER PAYING TAXES to pay all the liabilities as you have them listed there. I think you guys should be aware of this.

Thanks for the comment, Patti! I have gone back and forth on this. The problem is that you can only deduct student loan interest (which, incidentally, is an above-the-line deduction, which as I understand it means that you can take it in addition to the standard deduction even if you don’t itemize) if you file jointly. Since that is the bulk of our debt, it is in both of our financial best interest to file jointly so we can take the deduction, especially in the early years when our loan payments are almost 100% interest.

Yes– the ed interest is an issue with filing separately. However, if you file jointly and he sees the tax bill then it may help move things along. In my case, we didn’t file for years and we got killed in penalties and late fees. This is the cost of playing ostrich! If you file, then you can have a reckoning with the numbers.

While the student loan interest deduction is not available if you do MFS and it is an ‘above the line’ deduction, you can only deduct $2500 in interest, which if you are in a 25% bracket, only saves you $625 in taxes, which is small potatoes compared to the tax hammer that you husband will be on the receiving end of soon. I would not let student loan interest sway you too hard when it comes to protecting yourself in this situation.

You didn’t marry Jake for money (it seems). So, while money’s important (and it is) it’s not the only issue in your relationship.

When you talk with him, it’s important not to harp on the one issue that’s not in line with your expectations. Be sure to talk about other things, the points of agreement. And be sure that affirmation is a healthy part of what you’re saying.

It’s easier for people to hear healthy criticism if it’s not the only thing being said, that’s all.

About him buying your idea six months later, I’m a male with lots of male friends and I hate to say this, but he’s not the only one. What’s most important: him coming around, or you getting the credit for the wisdom?

If it’s the former, you sound astute and wise, and it sounds like you formulated your own solution – best of luck to the two of you!

I feel that many folks commenting on this blog have direct or indirect personal experience with spendthrifts shafting a marriage, and I think that is where much of the concern I’m reading comes from (especially given the chosen quotes in the article, which makes alarms ring off with me and I’m guessing many others)

That said, I would like to offer, as mentioned above, a bit of encouragement on the positive side for, you see, I married someone who simply cannot and will not truly budget.

When I mention we need to look at the spending plan (or whatever the latest blog or book recommends I call it), her eyes roll, she finds excuses why we have to wait to discuss it later, she will even get all romantic to distract me (like I haven’t taken advantage of that fact on occasion, “hey baby, I’ve got a budget spreadsheet I need you to review!” .

If I do get her to sit down and discuss a spending plan, her eyes roll up into her head and it’s like talking to someone with their fingers in their ears going, “la, la, la, la…”

So I feel your pain, and concern.

Yet somehow we are still making it through many years of marriage, to include kids (now with some in college), a variety of serious family issues, and many of the things life can throw at you. So while we will never likely be where I will feel completely comfortable (being the miserly hoarder that I am), we’re primed to do just fine financially because we have been able to agree on many of the larger financial decisions together and after years and years of trying different things I think I’ve found some that work for us.

But I still break out the spreadsheet when I’m in the mood, and it still works. Viva Excel!

So back to the article. From what I can see despite the problems, it appears he’s committed to paying bills, not hiding issues, and working with you on major life decisions and purchases. There is a fair amount of good in there. As long as there is respect and trust you’ll have a foundation to work from. You’ll have to eventually decide what you can and can’t live with, but even in marriages where the finances are good, that’s an issue. Best of luck.

Not a troll, Laura. I have read for years and only commented for a short time. If you want to listen to all of Honey’s BS and give her constructive criticism that she will ignore, then by all means…go for it. I personally think it’s a waste of everyone’s time.

The last time I checked I was free to say whatever I think. You are definitely free to disagree with me.

You are free to say whatever you think. It is the volume of comments you’ve made, almost all of which are nasty and negative, that pisses me off. It’s bullying, plain and simple.

Thank you for teaching me my lesson of the day: that it is better to be in financial debt but supportive of others who need support (which includes allowing them time to work through changes), than to be out of debt but somebody who makes repeated hurtful remarks designed to make their struggles even harder. Better to be broke than a bully.

During this conversation, Honey managed to imply that she is smarter than 98% of people that she meets and that they are too good to deal with “religious types.” She has insulted a lot of people, not just me.

I personally don’t feel sorry for her at this point. Furthermore, she has posted her entire life story on a blog. She had to have expected to get some comments that she wouldn’t like. I doubt she’s surprised at all and if she wasn’t strong enough to handle it she wouldn’t be posting anyways.

loading....

272

Laurasays:

03 August 2012 at 7:26 am

Your reply basically dismisses any self-examination on your part, justifies why you believe Honey “deserves” your bullying remarks, then states she should be able to take it if she isn’t a victim.

Instead of trying to control and censor other’s opinions, why don’t you focus your energy on giving this support of Honey’s situation like you mentioned.

I am an opinionated person but I don’t feel like people need to agree with me. The fact that you don’t doesn’t change my opinion on this end.

loading....

278

Laurasays:

03 August 2012 at 8:02 am

The problem is that the way in which you call what you perceive as BS is belittling and hurtful and yes, bullying. Plenty of other people have made posts calling what they perceive as BS without stooping that low.

You could focus your energies instead on providing Honey with support to help her with the changes she is struggling to make, or you can continue to make nasty and negative remarks that seem to make you feel better but do little to nothing to help. Just be clear to yourself as to what you are doing.

We do disagree and will continue to do so. My hope is that just as Honey will come around to thinking of her finances in a way that allows her to make positive change, you will eventually come around to thinking about the way you make posts and the language you choose to use to make positive change.

Personally, my money’s on Honey.

loading....

329

Maria Barkersays:

15 September 2012 at 9:17 am

In my opinion, this was not bullying. I also found it telling that Honey reacted strongly only to comments that said she was doing fine. If she had also liked any of the comments that told her she was not fine, and why, then I would be happier with her POV. As it is, I was hoping to find more help from the article. When I found it was pleading for indulgence, I hoped to find help in the comment section. So I kept reading. Holly has offered cogent points, and others have too. I wish Honey all the best, but my wishing is likely to have the same effect as all wishing, including Honey’s. NONE!

Tough spot to be in. For starters, STICK WITH THE SEPARATE FINANCES. That’s the best idea you mentioned!! And it’s great to compile data so that when he comes around, you’re ready to talk. But. BUT! WHat if he never comes around? Then I dont’ know what to tell you, dude.

He has $29k in credit card debt according to your numbers. That won’t stay at close to 0% forever.

Was the credit card debt just regular spending or was this used to help start the business?

The $438/month in super cheap for $100k in student loans obligations. That’ll take you 25 years to pay off that debt – Ouch!

I don’t see an active plan to pay off these obligations quickly. That scares me and seems to be financial irresponsible which is probably indicative of his business practices as Lance pointed out.

It is fine for you guys to bring different strengths to the table, but refusing to count and manage his money when you are doing the work is unacceptable. Refusing to participate in managing a healthy financial life is childish, selfish and immature. You guys need some marriage counseling to work this out.

You guys are in some serious financial trouble and need to start acting like it. Danger! Danger!

P.S. I was in a similar situation – 150k in the hole and sinking – and my spouse refused to participate in our financial life. The marriage didn’t make it. #1 cause of divorce = finances.

Except where noted otherwise, his credit card debt was accumulated when he was in law school and not earning a salary. He had over $50K in credit card debt when he graduated, so you can see he’d paid off quite a bit of it until he borrowed to get his business off the ground.

While I think he could have done a lot of things differently, he has only borrowed to achieve specific objectives that we both think will pay off in the long run, and he has spent the majority of our relationship paying off debt rather than accumulating it.

He is absolutely accumulating debt.
In your “reckoning” article you list his (5) five credit cards with a total balance of 27,659.00 and then today you list his SIX credit cards with a total balance of $28,947.00…$1,288.00 added debt to be exact.

In the reckoning article I listed the sixth credit card as belonging to me (since it’s in my name); I listed it in this article about his expenses and income because he makes the payments, not me (since he transferred one of his balances to my card).

Hope this clarifies things! He’s paid off about half that balance from the original transfer and can’t use that card to charge things, since it’s not in his name.

loading....

14

Scottsays:

02 August 2012 at 5:39 am

Honey,

I highly recommend you start with the money makeover book for yourself. Then consider (no just do it), enrolling in financial peace University with your partner. It will change your lives and your marriage forever.

I am not affiliated with Dave Ramsey in anyway but a fan of his show, book, and methodology.

Obviously you have to do this with consent of your partner so try to make the case as just an experiment you will both try.

We have the TMM book, as well as a few others (Debt is Slavery and at least one more). He wouldn’t ever enroll in FPU because he is an “evangelical atheist” and I don’t think he could be civil to religious types. While I think some of Dave Ramsey’s financial concepts would make sense to him, the packaging would totally distract him from the message.

Although Dave Ramsey is Christian and the course is usually offered through local churches, the course itself has a fairly light touch on the religious aspects. There are some biblical quotes that emphasize the points (i.e. ‘the borrower is slave to the lender’), but otherwise is pretty well focused just on the financial aspects.

The courses allow you to to visit the 1st class of the course as a ‘free trial’, or to visit any 1 class for free as a guest of someone attending the course. It may be worth trying a free one to see if it is something he could tolerate.

I am not particularly religious either but would be willing to get help from ANYONE who could help me if I were in the huge financial mess that he is in. I don’t know if this is accurate or not….but your description of him is making him sound like a huge overgrown narcissistic child.

loading....

177

mariasays:

02 August 2012 at 12:13 pm

I’m tired of all the excuses also. I wonder if anyone has kept tally of them in the last four articles.

loading....

197

Jen from Bostonsays:

02 August 2012 at 1:06 pm

Sometimes this sort of intolerance started with intolerance… There are some equally intolerant “Christians” out there who berate non-Christians, and/or constantly proselytize to the point that they are giving Christians as a whole a bad rep.

So, while his attitude is very, very unfortunate, I can see where he’s coming from. To many non-Christians the stereotype of church people who want nothing better than to save your soul any way they can because their Christian way is the ONLY way (and they would count other Christian denominations as being in the wrong) has some truth to it.

I know where he’s coming from because I had the same notion of Christians growing up. I’ve since learned that there are many different types of Christians, and I’ve tried, very hard, to disassociate being religious and church going with being religously bigoted and narrow minded. And I’ve noticed the same level of intolerance among the non-religious. So some of his attitude may be a fear that if he goes to one of those classes given by a church they’ll just try to convert him.

I think you’ve totally missed the point in this thread. The point is not about intolerance. The point is that this couple is totally unwilling to seek help from sources that are proven to help those in their situation.

Honey has repeatedly asked for helpful opinions and has found an excuse not to use each and every suggestion that would require action. It is completely frustrating and utterly ridiculous. In fact, I’m highly disappointed that a website with such a great reputation like Get Rich Slowly would publish this garbage in what seems like a blatant attempt to increase traffic.

loading....

283

Honey Smithsays:

03 August 2012 at 9:11 am

@Greg, I’m confused how people could say I’m resisting change. Changes are in the works, and will be blogged about. It’s only been 2 weeks since I started working at GRS! I still have to to sort through all the advice, phase in the changes, and wait for the effects to reveal themselves. This process is going to take months , and of course since I will be Doing What Works For Me, it will be different from what others might choose

loading....

305

Joycesays:

03 August 2012 at 5:16 pm

Dang… As a business owner, you certainly can’t be hostile to those that don’t have the same belief as you or you eliminate an enormous client base. People don’t like to pay people that are not civil to them.

loading....

256

Pattisays:

03 August 2012 at 4:48 am

While Total Money Makeover helped me in the beginning to assess things and make some initial changes, Elizabeth Warren’s All Your Worth, helped me when I needed to get back on track and is a major reason (other than GRS) why I have been successful achieving my personal finance goals. Totally secular approach, if you know Dave Ramsey won’t work for you.

My parents are in a similar situation. My father is a spender and my mom is a saver. My mother managed to have him debt free but it lasted 5 months he got back into debt fixing and inheritance he received. My father also thinks like your husband that as long as they make enough money to make ends meet it’s fine. No matter what you earn it’s how much you keep that matters.

It may look like you need marraige counseling, or is there someone in his life that he respects and listens to who can have chat with him? Maybe show him how serious this situation is otherwise he will continue on his destructive path. I hope he has his business account separate from his personal and on top that have another savings account for taxes. Hope it all works out.

2 very small cents here – Your husband doesn’t have the same concerns about your financial situation as you. He doesn’t care about his financial situation like you do. You seem convinced he will “get on the band wagon” and the language you write this article in is dripping with your intentions for his life. Your desires for him are understandable, but if it’s not his desire, it may cause you more stress than you already have to focus on what he’s not doing ‘right’. Plus you probably can’t change him, either through subtle or more blunt approaches.Further I am sensing the seeds of lots of relationship stress now and in the future as well due to this issue.
Does he begrudge you sharing his financial info to everyone on GRS? If not, I’d say that’s a big step on his part. Most people wouldn’t be so generous or revealing, so kudos to him.
So perhaps you should focus strictly on you? In the spirit of ‘be the change you want to see in the world’ then maybe you should boldly attack your debt and ask for his emotional support while you do what you need to do. That alone may go alot farther in helping him “see things differently” than constantly nagging, sending articles, displaying his monetary affairs for everyone to comment on.
Like other readers have mentioned, if this is a true sore point between you two (or if you’re really hung up on this and it’s affecting your relationship) perhaps talking it all over with a counselor would be beneficial? Who knows, it may be the best thing you’ll ever do for your relationship, and may be more important at the moment than getting him to change his mind about getting out of debt (yep, I just said that on a finance blog)!

I’ve had the most success with leading by positive example rather than trying to convince someone that smart financial planning is important. I graduated from school over 2 years ago and began immediately attacking my debt and avoiding letting my lifestyle inflate. It didn’t happen immediately, but I noticed my friends and fiance gradually start responding to the thrill I got when i paid off a loan or reached a milestone. This caused them to want to do more so THEY started the conversation with me about how to better for themselves. Make paying down your debt and saving responsibly your hobby and take joy in it. Its infectious.

Lead by example is my current plan, yes. Our student debt is pretty comparable and when I met him I had about $20K in credit card debt, so if I show him what I can do on my pitiful salary, it will hopefully serve as a motivator for him.

I get the feeling reading your second blog that he just doesn’t WANT to get it and doesn’t trust your judgement. I’m not saying that him trusting your judgement = having joint accounts. Him taking some of your advice and being OPEN to change = him trusting your judgement.

It’s fine, all be it more difficult, to keep separate finances. In our relationship, having his/mine/ours accounts, made me feel like we were less of a team.

For us it was a no brainer – both our mothers had handled the finances for our families though my father handled the books for his business (though, he is Mr Letter of the Law, filing taxes on time and keeping pristine books). However, early on we sat down and discussed what our goals were. Get out of debt? Able to pay cash for home renovations or a nice vacation? Save for our future children’s college? Retire comfortably? These goals keep changing, so we are always having that discussion.

This house of cards surrounded with smoke and mirrors can only stand for so long, and it looks like the IRS is going to be the Big Bad Wolf that blows the whole thing down. The IRS has a serious lack of compassion for people who do stupid things instead of paying their Uncle Sam!

An illness, unexpected pregnancy, or an injury are also life events that test a strong and financially sound marriage, which this sure does not look like to me.

Everything is NOT “working fine”. I don’t care if they go with Dave Ramsey Suzi Orman, or any other valid program, but if when my finances were about 25% as out of control as this in 1995, I got a bleeding ulcer with worry until we came up with a plan.

Emily, I agree with everything you wrote. Relationshipwise, this woman Honey seems to be more “mommy” than wife. One hint, I think you mean the word albeit, rather than the 3 words all be it. Like your point of view.

You never know what kind of punch in the gut life event will come your way. Even in your 20s. At 25 years old, 8 months after graduating from dental school, I developed a medical condition that totally prevents me from working. It literally happened overnight. Good thing I had a strong private disability policy and I can cover monthly expenses. My husband and I had no credit card debt and enough excess from the disability policy that we could travel to experts out of state to get the best care. (Maybe I should submit this as a reader story…)

What if an illness happened, or a bad car accident? What if he can’t bring in an income for his business for a few months? Will his credit be shot? Will his business go under? What sort of financial protections does he have in place for his business that he has obviously worked so hard for?

Perhaps from the angle of “Darling I want your business to be successful. There are some simple changes we can make to get your business in a stronger position in case the unexpected happens. We can make small baby steps and do this together.” Or do a sports metaphor “baby you seem to be doing great offense with you business what sort of defense is in place.” Whatever works.

Wow. I’ve always been a firm believer in joint finances and working as a team, possibly because once kids are introduced, it forces both parties to use their compromising skills. My significant other is a financial wreck, but thankfully he trusted me to take over with the family bills/budgeting. You mentioned a psychological aspect tied to your dear hubby’s reluctance to entrust you with the coffers, stemming from his parents and their relationship with money. My curiousity is piqued; is this something you’d be willing to write more about?

This. I’m still wading through all the comments and was looking for someone to mention Honey’s remark that Jake comes from a family where money was used as a weapon. Based on the limited info I have, my best guess is that Jake’s attitude in part may be from that experience: if he can spend what he wants when he wants, then he perceives money can’t be used against him.

Given this, Honey, if I were you I would suggest counseling to work through the differences. If you go that route, try a communication technique: I observe, I think/feel, I want, otherwise I’ll do X. For example, “These numbers suggest problems with balancing money and a difference in our beliefs. This worries me that our relationship won’t succeed. I want us to succeed in this marriage and in life, and to do so, we have to be on the same page about money. Given your background of X, I would like to go to counseling [not "try" counseling, just "go to" counseling]. If you refuse to go, I will [stay with you but respect you less, insist on paying taxes separately so I won't share your trouble with the IRS, divorce you, refuse to go along with major purchases such as buying a house or having kids, whatever].”

Absolutely keep your finances separate. Do not get joint credit cards or loans. Focus on paying only your own stuff back for now. You may be married, but you are not yet in a partnership and you must protect yourself until the day comes when being in a partnership becomes more important to Jake than spending money his own way.

BTW, although I’m not atheist, I know people who can’t abide any package that has religious wrappings on it so I totally get his attitude. If he can’t go for Dave Ramsey, see if he’d be open to other books or blogs that aren’t Xtian. Have either of you read Jerrold Mundis’s book “How to Get Out of Debt, Stay Out of Debt, and Live Prosperously”? Not religious and highly recommended (although I don’t know if either of you are receptive to Debtors Anonymous).

Finally, Jake needs a business plan. Plain and simple. Regardless of what he thinks he needs for his personal finances, the #1 basic rule of anyone starting their own business is to have a business plan with budget. If you work with him on anything, work with him on that. But keep your finances separate.

I am really happy to hear you can access his Mint account. This shows he is not trying to hide any details from Honey which is a great place to start.

Since you already seem to be doing a bit of work for him on the personal side, maybe it is time to ramp up the work you and he do together on the business? You can take over things like making sure the taxes get paid on time. I know this could be tricky to work together but if you are going to be up late over worrying about the business and your own finances anyway, might as well contribute your talents to help him succeed?

I don’t think I can provide any advice that’s both relationship-affirming and financially astute, because your posts make your husband (who refers to you as “a girl he’s dating?”) seem quite toxic, at least financially.

He has 6 credit cards and 4 student loans, and he’s making minimum payments. He’s gone from making $90,000 to (you hope!) $47,000 and hasn’t changed his spending habits. He refuses to make a budget, cut his spending, save money, or pay his taxes. And it sounds like he’s got YOU fearing that you’re the one who’s somehow going to destroy your relationship if you try to get him to budget?

I would recommend counselling (although frankly, I’m not sure how you’ll afford it). Comments on a blog are not going to solve your problems at this point.

Thank you, I agree. This entire post just doesn’t sit well with me. The husband really isn’t on board, and doesn’t seem to want to change. This means Honey will be seen as cramping his style – even though she’s trying to save him from himself.

Is it possible that he has undiagnosed ADHD? My husband and child both have it. Your husband’s behaviors sound similar.

Also, he needs to realize that he is not a wealthy lawyer. This is a trap many young lawyers fall into – they think because they are LAWYERS, they can spend like they’ve got it when they don’t. How do I know? I am a not-so-new lawyer who has seen it a lot.

Respectfully but totally disagree with you. There are many, many adults with Asperger’s and other mild forms of autism who aren’t diagnosed. The emphasis on diagnosing still tends to be on children when they display trouble coping in school. Adults who have AS or similar and who have trouble coping are usually labeled as blatantly irresponsible or worse.

I am not saying that this IS Jake’s issue, only that I cannot say that it’s not.

loading....

168

Ramblin' Ma'amsays:

02 August 2012 at 11:57 am

Agreed that there are many adults unknowingly on the autism spectrum. However, in this context it reads like another rationalization.

loading....

193

Elizabethsays:

02 August 2012 at 12:51 pm

Actually, my husband was told by a psychiatrist that he may have Aspergers (this was a a youngish teen) his father had mental issues and more than one disorder, so this is not definite, but it is not out of the question either. He also has these kind of problems with money – don’t know if it actually is a symptom of that, though. We just have me take care of the money for the most part and I let him know if/when he can buy things – he doesn’t have any accounts of his own (other than student loan debts) because he would go beyond emptying them into incurring a number of overdraft fees ($30 each time convinced me he doesn’t need his own cars pretty quickly).

loading....

32

Katiesays:

02 August 2012 at 6:23 am

Yaaaawwwnnn. Honey, really, have you taken any advice offered here on GRS in regard to your prior questions to the readers? Or are ya just spillin’ it to collect the award for “Most Commented on Posts”. YOU’RE GOING TO CARRY THE HEAVY IN THIS RELATIONSHIP FOR THE REST OF YOUR LIFE. If you want to do that, go ahead. It’s not about getting advice, it’s about accepting what you’ve already committed to.
The only advice you can get has been covered time and time again. Someone here needs a second job or your just going to have to keep racking it up and chipping away for the rest of your life.

Changes are in the works, but it’s meaningless to describe them until people know where we’re starting from, I think. This is only my second post as a staff writer, and it’s a story that can’t be told in a day

So what you’re saying is…that this is all a prelude to a big conclusion? You’ve already “finished the book” or come to terms but you’re dragging us through the chapters? Isn’t that fraud? Wow! I’m out.

First, I’m no sure JD and Kris are the best example since they ended up getting divorced.

Second, I feel your pain. I am married to Mr. Stubborn (also known as Mr. Sam). If I tell him to do something (and I should be known as Ms. Bossypants) he will dig his heels in, if I tell him to do something twice, he will do the opposite, and so on.

In our relationship, I am the spendthrift. But, Mr. Sam will spend as much money as is available without thought or planning. He has the same problem with cookies, I can eat one cookie a day, he will eat a whole bag in a day. Mr. Sam also is prone to not paying bills until he gets a pink envelope (that would be the third notice).

When we first moved in together (before marriage), I paid all the joint bills and my bills and he was responsible for his bills (which included student loans, car ins., credit cards etc.). We did a house acct and we each contributed a set amount to the household based on income. I contributed more because I made more.

After we got married, 2006, we undertook Dave Ramsey’s Total Money Makeover. We had, combined, $55,500 in debt (most of it was his, but since we were married, it was ours). We worked the debt snowball to kill the debt in just over a year.

We also cut up all our credit cards and we went to an allowance system, we each got the same amount to spend for every two weeks and when it was gone it was gone. There were tons of other steps along the way as well, spending plan, figuring out where our money was going by tracking every penny, etc.

Mr. Sam was resistant at first, but when I presented my plan to him, on paper with charts (which was his language) he could see that I wasn’t crazy.

We still, 5 years later, talk quite a bit about money. I don’t think it spoils the romance, rather he is happy, very happy to have no debt (except mortgages) and over time we have both settled into our finance rules and routine. It takes time and there were lots of arguments about it.

This is your husband, I wouldn’t be afraid to keep talking about this issue, until you hit on whatever is going to motivate him. He’s got to come to grips with what works for him, but you have to be a team to make progress on your debt and your mutual goals.

I’m really not a fan of separate finances, I just don’t understand how it works when you’ve got different levels of income (maybe it can work if you both earn about the same). I have a dear friend at work who keeps her finances separate from her husband, who earns much less than she does. At present he does not max out his tax advantaged retirement accounts because he doesn’t feel like he can do based on what he earns. Mr. Sam would have the same problem if we didn’t have joint finances. But it benefits both of us to put as much money into 401ks and IRAs now. I’m not sure what my friend is going to do, how are they going to retire if only one of them is putting money away for retirement.

Sam, I agree about JD and Kris, and I told him openly several YEARS ago that about 90% of the couples I know who did not combine finances by their fifth anniversary went on to divorce. I am sorry that I was correct.

It is usually a symptom of a couple not being able to communicate and work things out together (EXCEPTION: Second marriages when both have children and/or assets to manage).

I don’t support her comment or her contention, but I do support actually reading something before responding negatively to it.

“about 90% of the couples I KNOW”

loading....

38

LauraEllesays:

02 August 2012 at 6:43 am

The most financially astute advice I can give to Honey is to keep her finances 100% separate. Everything, including getting a mortgage in her own name [he can sign a quit claim] and filing taxes separately. Do not enter into any joint debt or assets with him, ever.

I can’t give “relationship affirming” advice. [What does that even mean?!] He does not sound interested in even meeting Honey halfway or even entertaining her ideas. And that’s worrisome- because what else is he dismissing, ignoring and disrespecting?

Honey and Hubby need more help than comments on a blog can give. She doesn’t want to acknowledge that, however, so I reiterate my financial advice: Keep everything 100% separate and look after her own interests.

Also, working this through with a counselor or mediator is an excellent idea. This is a touchy subject, he’s clearly in a significant amount of denial, and he is going to have to make major changes in order to achieve any measure of security.

A counselor might also rejigger priorities a bit; at the moment, he’s got a $0 annual savings budget and a $120 annual charity budget which, forgive me, does not speak very well of his ability to allocate beyond the day-to-day.

I’m sympathetic to your situation, but am definitely aghast at how your husband can think he’s doing okay when 53% of his monthly expenses are loan repayments.

The last credit card makes me wince, too. He took out a new line of credit at 10% to make a loan to his business partner, who couldn’t cover $1,350 worth of expenses?

Also, is he still charging things to these cards?

I agree with others that it’s too soon to combine your finances, not the least because I think the combined total of your debts seems suffocating. Better that you each individually tackle debts, get into better financial shape and habits, and then reassess.

But I wonder if it would be helpful for the two of you to prioritize your remaining wedding debt. I know it’s split between two cards, one for each of you; but it may be psychologically useful for the two of you to take on this relatively small debt together–and to share the satisfaction of paying it off together.

“Love is all you need” is one of the biggest frauds perpetrated on the American public of the last 100 years. Marriage and family are as much business relationships as anything and it doesn’t really matter how much you love each other of you can’t afford to feed your kids. Love may be nessecary for a marriage to work, but it is not sufficient. You wouldn’t hire someone who was super nice and friendly if he couldn’t get the job done, so why would you marry someone with the same problem? Single people, take note – marriage is forever: through raising kids, buying houses, paying for weddings and college, growing old, retiring and dying. Think about these things before you say “I do”. But young people won’t listen – this is why they have arranged marriages in India (not that I’m saying that’s a good idea, either).

Ugh. I’ve tried really hard to read Honey’s posts with an open mind, but I read GRS to learn about personal finance, not to read about someone else’s train wreck. JD – I’m thrilled for you that you have made a ton of money off this blog, but I already see it going seriously down hill now that you’ve taken a step back.

During the trial period for new writers, there were several suggestions about wanting writers from different points in the process– just starting out, on the road to financial freedom, etc etc. I think many people will identify with Honey and enjoy reading about her challenges and successes.

Well Honey, I’m in a similar boat in that my husband wants to just make it all work out and doesn’t care so much about the day to day budget. Our big differences are we don’t have any credit card debt or student loans. But he says stuff like if we have to put a trip to Europe on a credit card that’s fine but we will be taking our kids to Europe before they are 18. I totally disagree and started a travel fund that I am slowly building up. Luckily I handle the finances but I feel like one arm is tied behind my back because I stay at home with the kids. I miss the income I used to contribute. I help by controlling my spending and packing meals for our day trips with the kids.

I agree to keep your finances separate for now. And you should focus on paying off YOUR debt. I hope he comes around and is more open to budgeting.

In the outlines of your and your husband’s expenses, I noticed that you mentioned healthcare expenses (copays etc), long-term care insurance, and massages (which you’ve corrected to be back under healthcare expenses). Nowhere do I see how much you are spending on actual healthcare insurance. That is a significant chunk of change (you are American, right?) that seems to be missing from the report.

I also really hope that you got his permission before you posted his (very personal, and in fact probably PII data) financial information. You mentioned in an earlier post, unless I’m mixing up writers, that he doesn’t read your blog posts.

Honey, this article is honest, interesting and will help others; thank you for sharing.
I was more like Jake, than you, until I remarried to a frugal man. I wanted to learn, from him, about handling finances more wisely than I had done previously. He has been a terrific mentor and we have prospered together.
In an earlier comment by Maria, she suggested sharing no financial burdens/contracts with him and I agree. If there are plans for you to marry, postpone them until he changes how he handles money, for the better. Combining finances with Jake will be problematic, as you know.
The only people that can really affirm your relationship are Jake and you. I do not mean to discourage you, in your partnership, but to encourage you to continue to recognize the real problems with Jake’s attitude towards spending.
I wish you both the best.

they are married, and they racked up a bunch of additional credit card debt to do it.

they are “keeping their finances separate,” but filing joint income taxes. i am certainly not an expert, but that seems a bit incongruous to me.

not to mix metaphors, but i think honey has hitched her wagon to a sinking ship – he started a business with a guy who not only can’t pay his half of the overhead but also apparently can’t get his own line of credit to handle the shortfall and another who seems to have kept the business from paying taxes for half the year because his own taxes are delinquent. he clearly can’t manage his personal finances, but thinks he can run his own business. he is $200k in debt but thinks it has “all worked out so far” because he can afford the minimum payments on his credit cards. he wants to grow a business, buy a house, and relocate to a different part of the country, without seeming to realize that not only are those goals not compatible with each other but they aren’t realistic for someone with $200k in debt who makes $50k/year. he apparently refuses to consider cancelling cable, trying to attend a successful program like FPU, or even think about reducing the food budget to something less than an astronomical $600/month for two people.

honey is in a pretty tough spot herself, but at least she has acknowledged the problem, is seeking advice, and starting to make some changes.

a year ago i would have strongly recommended pre-marital counseling so they would work out some of these issues, but since that ship has sailed, i think they need to get themselves to a marriage counselor and a financial planner ASAP. these two not only aren’t on the same page, i don’t think they are standing in the same bookstore.

a previous commenter said something to the effect that the saying “love is all you need” is a falacy, and i agree. i hope honey and jake can figure that out as well.

WHOOPS!
Kate, thanks for correcting me. I read it but it must not have computed.
I’m so sorry Honey for my interpretation of your relationship.
And Kate, you are correct, it does make a huge difference as to how all this affects Honey.
I blew it and I apologize.

Cancelling the Mensa membership would save you $60 ($5 per month). Not sure what tangible benefits it provides, but I could be wrong. Just a thought. Over 20 years, that’s over a thousand dollars.

As far as the budgeting thing goes, it seems that you are along for the ride. But you know what they say, if you don’t know where you are going, it doesn’t matter where you end up. If none of it matters, then it seems somewhat strange that you are tracking it. If you think he’s destined to out-earn his money habits, then why not let it go? Why obsess over it if you both think that the low earnings are just a temporary circumstance of him starting his own business? And if you don’t think he’s destined to out-earn his money habits, then it doesn’t matter how much he makes (or you make combined) in the long-term because bad habits can erase any amount of earnings.

In the outlines of your and your husband’s expenses, I noticed that you mentioned healthcare expenses (copays etc), long-term care insurance, and massages (which you’ve corrected to be back under healthcare expenses). Nowhere do I see how much you are spending on actual healthcare insurance. That is a significant chunk of change (you are American, right?) that seems to be missing from the report.

I also really hope that you got his permission before you posted his (very personal, and in fact probably PII data) financial information. You mentioned in an earlier post, unless I’m mixing up writers, that he doesn’t read your blog posts.

I am a bookkeeper for a small business so I have a few suggestions along that line. First does he have a professional accountant for his business? He should. He may owe income taxes at the end of the year, he will owe self employment taxes. He may also need a business license and owe property taxes. You have stated that his partner does not have a good work ethic and he has had to borrow money to cover overhead (which is pretty shocking since your husband is in no position to be a creditor). It might be wise to evaluate whether he needs a partner. Also is the client referral service paying off? Has he run any metrics on it? When you own your own business you really need to stay on top of it.
On another note you stated in an earlier post that he has expressed a desire to build his business, buy a house and move to another part of the country. Those aren’t compatible goals. Kristin may have a point about the ADHD. If your health insurance covers it you might consider a psychological screening. He can acquire tools and coping mechanisms to overcome some of the roadblocks.
Good Luck!

As someone else who has worked as a book keeper for several small businesses, I second having a good accountant. Also, are he and his partner’s actually taking salaries or are they taking money out in the form of loans from the business so that they don’t have to claim it as income and pay taxes and they have the loan as an asset to the business. I had several clients go out of business because they deluded themselves that they had a viable business b/c the loan made the business look like it was in the black, but they had no equity because they withdrew it all to pay personal expenses. Also, the IRS frowns on taking loans and not making payments to pay it back. There can be stiff penalties. According to accountants, I have worked with, the IRS flags loans not being paid back.

I’ll add my two cents with this comment, since they’re similar to what I was going to say anyhow.

Self employment taxes are different than regular income taxes. My husband started his own company about 9 months ago, so we’ve been learning a lot about the process. I know some of this will depend on how the company is set up and how he is paid, but if he is considered self employed, he will have to pay regular income taxes like you pay, PLUS whatever an employer would have to pay, like unemployment insurance, the full social security amount as well as state and federal taxes. For my husband, even though he had a pretty good idea going in what percentages they were all going to be, it has been a bit of a shock just how high it all is.

That said, make sure to save enough to pay those bills when they come in, because the penalties of not paying the government what they’re owed are big.

Also, my husband has adult ADD. He has been on medication for it for the past 10 years and it has made a huge difference for him. 10 years ago, there is no way he could have handled the details of running his own company without running it into the ground. Today, he manages it well. So, it can be done and managed. Medical help can make a huge difference, if it is necessary.

You are worried about becoming “The Girl Who Only Says No or The Girl Who Only Talks About Money” but you’re on your way to becoming “The Tired Woman That Cleans Up Her Husband’s Messes and Pays Her Husband’s Debts.”

My husband will literally sit in the chair next to me and check out of budget discussions by falling asleep. That’s how much he does not want to deal with the subject.

He is, however, a visual organizer. I finally put every debt we had into a graph with when it would be paid off and colored it in rainbow colors. Finally, it made sense to him and he became very interested in our progress.

Perhaps if you could graph how long it will take to pay off all this debt and overlay it with life events pegged to specific times — house, baby, new car, etc. — he would get the picture.

He may be like my husband, though, who said when I showed him that we are down from 13 lines to 2, that he missed all the colors!

Agree, different people process information differently. Until I had put down on paper, with charts, how we could pay off our $55,000 in debt Mr. Sam couldn’t see it, couldn’t think it, couldn’t imagine it.

I think you are burying your head in the sand. What your husband does can and will affect you–regardless of whether your finances are combined or separate. If you continue to ignore the situation, you and your marriage are headed for big trouble.

He should be saving a bit of every check for quarterly taxes, a SEP IRA (which will save him taxes), and an emergency fund both for himself and for the business.

Check out the book “The Money Book for Freelancers, Part-timers, and the Self-Employed” by Joseph D’Agnese and Denise Kiernan. Good system for managing irregular income.

Would Jake object if you refused to go halvsies on things like cable? And by “object,” I mean would it start a huge fight?
Because aside from keeping your finances separate, I think all you can do is set an example, hope it rubs off on him, and offer input on his finances until you see it’s making him defensive.
“One of the things I’ve learned over the last six years is that he almost never agrees with me the moment when I propose something; however, six months to a year later he’ll suggest it like it was his own idea.”
Haha…I can TOTALLY relate; my significant other is the same way. After years of being careless with his finances, I think I’m finally starting to rub off on him and he’s taking control of them like I’ve never seen him do. I think it’s good that Jake pointed out your frugality–it means he’s noticing, and if he comes around with other issues, I’ll bet he comes around with this one, too.

Kristin, I think that he will eventually come around and once he does, he will probably be even more gung-ho about it than I am (if history is any indicator). I’d prefer that happen sooner than later, of course.

I did mention that I might have to drop out of the cable bill, and his response was “just let me know,” so while there was a time where that would cause a fight, I don’t think it would now.

If I needed to talk about the cable bill or any other bill and my husband refused or got snippy with me, he would find himself sleeping in a sleeping bag in the garage.

I have a hard time understanding how someone who is as smart as you claim to be could be living as a giant doormat. Seriously, grow some balls and learn to assert yourself or spend the rest of your life tiptoeing around your selfish husband.

Sorry, her comments bring out the worst in me. I’m starting to agree with some of the others that she can’t possibly be a real person writing. So….either way, I’m wasting my time.

loading....

67

Tinasays:

02 August 2012 at 8:35 am

My husband and I lived just like you. Hubby and I both had full time jobs plus a side business. My hubby being the spender(raised that way too) and me being the saver, made for some hard financial years. Hubby said “money is replaceable” when he would spend money on junk and had nothing to show for it. All of my hounding and budget making didn’t work because he didn’t believe in budgets and my credit paid too for the mistakes he made.

Here is how we solved it:

1)The checking account is only in my name and all full time money goes in automatically to pay bills. A separate business account handled all business transactions and he isn’t allowed to dip into it unless he needs business items. That way we could allow a cushion in the business for taxes, insurance, advertising, etc.

2)Tell him what he needs to make each month to pay bills. Include 1/12 of the insurance, taxes, etc. This helped because he knew the goal and if he made more than the goal, he knew his allowance would get a little more plus allocating the rest to savings and the kids accounts.

3)You must give him some freedom to spend–give him an allowance so he knows once it is gone, he can’t go get more money. This really helped my husband control what he really wants and what he needs. It gets him thinking of money differently than he was raised.

4)MOST IMPORTANTLY–Find out what his dreams are. I have said this before on this blog but once you find out that he wants to retire in a tropical place or buy a nicer home, you can use this as a tool to help him realize that you won’t get those things unless his spending changes.

It isn’t my nagging or budgets that keep him from spending. His dream of leaving our town with humid summers and snowy winters keeps him in perspective.

Honey,
Completely agree that you need to maintain separate finances in the near term, until some acceptable behavioral changes can be made.

Step one is to have a third-party (perhaps a professional financial counselor) demonstrate to him that the mess exists, and it is of enormous and immediate magnitude, so that some behavior change can happen sooner rather than later. Not only have you both behaved irresponsibly in the past, but the hole is getting deeper every single day.

Step two:I don’t understand how marriage works with separate finances, any more than I understand how marriage works with separate residences. Marriage is a 100% legal, emotional, spiritual, physical, and yes, financial commitment to your spouse. If your finances are separate, there will always be trust issues in your relationship. If you are serious about your marriage’s long-term future, once you both agree to the magnitude of the problem, and can adjust spending behaviors enough to stop digging the hole, you need to combine your finances and tackle everything together. He will NOT get on board until you demonstrate in love that your only goal is to create a viable future for you as a married couple, and that your combined resources are necessary to make that happen. If this continues to be his problem only, it will not be fixed. You are married, so you are one together. Take ownership and get after it together.

My wife and I combined our finances 6 months prior to marrying 1.5 years ago, and she is the spender. She brought 21K in debt (student loans, auto, and credit card) to our relationship, which is now 1.5K. She had (and continues to have) a small business which requires quarterly estimated tax payments of roughly $1,300, which she never made until her returns were due, with all applicable penalties. I’m the treasurer of that business now, and we haven’t missed a tax payment for over a year. We’ve since bought a house together, and we budget together-she still does NOT enjoy discussing money or budgeting, but 1) she understands how important it is to me that we do both of those regularly, and 2)she is gradually beginning to see the fruits of frugality and financial peace in our life and relationship together. Hope this helps.

I am a sort of “reformed” spender who is now, in my marriage, keeping track of the bills and outgoing money. We have a joint checking/savings account and one joint “gift” account. Things are working for us. My husband is only responsible for paying one bill (because it’s a family plan with his extended relatives, and he is responsible for getting their share and ours paid).

As for advice, now that I am much more responsible than I was before (I wasn’t married at that time), I don’t think there’s much you can do until he reaches his own tipping point. Mine was when my credit cards went into collections and I only had access to using a debit card. I HAD to change, because unless I had the actual money, it couldn’t be purchased. And now that my hubby and I are building up savings and paying our bills immediately, it feels great. That is motivating in itself.

Get him on board? I don’t think you can. And frankly, it would stress me out to feel tied to someone else’s irresponsible actions. (Hell, I used to stress MYSELF out.) I imagine he also has no urgency to change because he feels you are his “back-up” plan in case every implodes. So as others have said, do everything in your power to NOT be that safety net–or have your finances tied to his. If you can stay detached financially and emotionally when it comes to his financial fitness, things may work out. (But … if you have kids … eeek …)

You are going to get nowhere fast if you aren’t on the same page. I recommend attending Dave Ramsey’s Finacial Peace University.

You two have made a huge mess. Good lord you are over $200K in debt and on a good month bring home only a combined $7K a month.You guys need to get you income up and get it up fast to knock out this debt.

By the way we are Debt Free, do a budget every month and have combined all of our money and accounts.

Declaring bankruptcy won’t be a free ticket out of debt for them at all. Student loans are NOT dischargeable in bankruptcy (with very rare exceptions like maybe with full permanent disability). The vast bulk of their debt is student loans. They’re stuck with it. Plus their income is too high to discharge their debts in general and they’d have to make payments to repay the debtors. Their income is > median household income so they likely wouldn’t qualify for chapter 7. They’d have to do chapter 13 which means repaying the debts over time.

I commented on your first article, as most of the rest of the free world! With that said, I’ll limit my comment to “good luck”. You’re going to need it. I’m not being sarcastic because I’m not any better off-as far as having a spouse that just doesn’t get it-and feel it would be ironic at best, and two-faced at worst, to offer advice.

Honey, I admire your courage in sharing your journey with a tough crowd. My husband and I had a similar profile when we got married – he’s an engineer who was making the big bucks as soon as he got out of college (with almost no debt) while I had opted for impractical-no-career-value-financed graduate degree (ahem, yes, hindsight). What got us more or less on the same page was attending a Dave Ramsey-based one-day financial seminar at our church – it was actually required as part of our premarital counseling. You could see if he would go for the Financial Peace University classes, but Ramsey also does one-day speeches/seminars that might help get his wheels turning if he’s not ready for that commitment yet. I assume there are others out there who do similar things – Suze Orman, etc. – but Ramsey is the one I have experience with.

And it sounds like you already have this in mind, but while finances are certainly important, they aren’t the sum total of your relationship. As this is floating around at the forefront of your mind, make sure that you don’t allow this to become the center of your relationship – spend most of your time on the aspects of your relationship that are stronger and build on those. If nothing else, it will keep you guys balanced. I’m looking forward to watching you move forward!

Has your husband talked with a CPA about his quarterly tax payments? He really should. Your calculations for his estimated tax obligation for the year seem very low to me. I’ve been self-employed for 15 years. And I can tell you from experience that If you are not setting aside a very substantial monthly amount for quarterly tax payments and retirement, you will be burned come April 15th. I know this from painful experience. I miscalculated one year, and ended up owing $9K. I had to borrow the money from my business line of credit and it took me several years to pay it off.

I meet with my CPA several times per year, so we both have a good idea of what my actual income really is, and whether we need to adjust my quarterly tax payments. A good relationship with a CPA is key.

Yeah, I’m self employed, and I set aside 25% of gross income for quarterly taxes. Because we live in a state with no income tax and my income isn’t very high, I usually end up owing a bit less than that, but I’ve always heard the rule of thumb is a quarter to a third of income.

This woman is in for a world of hurt down the road. A man who says he wants to be in business for himself, but doesn’t want to budget, is a man who is playing games. And she will be the loser in this game. Whether she combines finances with him or not (and I strongly advise NOT!, she could, depending on state laws where she lives, be on the hook for debts he runs up. (Learned this the hard way when I found myself responsible for half of my ex’s debts after our divorce).
When it comes to financial matters, a marriage is a contractual affair, not a romantic one. Both partners need to show maturity, view their reality objectively, and not confuse their finances with their fantasies.
The author is making the classic, classic mistake, made by millions of women over time, of believing “Oh, he loves me! He’ll change!” No dear, he won’t.

So far the only thing I have enjoyed about this series is that the reconciliation of accounts is nicknamed “The Reckoning”. That was clever.

This inspired me to visit the Mensa website and look at the criteria for membership. It is pretty impressive that both you and your husband have IQs in the top 2% of the general population. Which means the combination of your elite minds through marriage should yield some very powerful brainpower. Unfortunately, personal finance is just common sense… but maybe if we framed your situation as one of those little IQ test puzzles… debt + lack of common sense + ego = ?

Where does hindsight go, in this formula? Yes, ego is definitely part of the equation (on both sides). When you have empirical proof that you are smarter than 98% of the people you meet, it is hard to admit sometimes that the other person has a point.

You’ve got to be kidding me. My IQ is also high enough to qualify for Mensa, but I’m smart enough to realize that IQ is a very specific way of measuring a specific kind of intelligence. I certainly don’t think it means I’m smarter than 98% of the population, especially when faced with empirical proof every day that other people know plenty of things I don’t.

I was being facetious, for Pete’s sake For one thing, almost everyone I know has or is getting a PhD, so I’m not actually smarter than most of the people I know. For another, smart people do dumb things ALL THE TIME, because as a general rule people use emotion to make most of their decisions, not logic. I fall into this category, too, and I’m painfully aware of it.

My point would have been better articulated if I had said something along the lines of “people with high IQs tend to forget that they don’t make the majority of their decisions based on facts.” We’re therefore as fallible as anyone else – probably a lot more so, I’d argue, since it’s so easy to be self-aggrandizing.

Anyway, I apologize if I seemed to imply that our performance on one specific test says anything about our relative worth as human beings. It surely doesn’t.

I do not have a Phd…nor do I belong to Mensa. However, you make me feel like an absolute genius!!!!

Please keep talking.

loading....

196

Ksays:

02 August 2012 at 1:02 pm

Getting a PhD is not necessarily the mark of smartness.

Often it’s a mark of “bad job market”, and “poor job field choice” .

loading....

248

AnnWsays:

02 August 2012 at 9:12 pm

This can’t be a real post. You can’t be a real person, thinking because you have a real PhD that you are better than other people. A lot of people could get PhD’s but choose not to. It is very self indulgent. Mensa is a pretentious association. If you can’t or won’t pay your taxes, you aren’t very smart. Lack of understanding of the autism spectrum is not very “intelligent” either. You should resign from this position. You are wasting our time.

loading....

254

Carlasays:

02 August 2012 at 11:41 pm

Honey, I tried. Honestly. Over your past few posts I’ve defended you when others torn into you, but I just cant justify it anymore. I reread all of your comments in this thread and I am dumbfounded.

1. What does having a high IQ have to do with personal finance? I know you didn’t bring it up at first, but you continue to harp on it.

2. Some of the most intelligent people I know do not have PhDs unless they chose to work in a field that absolutely requires one.

3. Most people with high-average to high IQs don’t need to advertise it. Actions speak louder than words.

4. I was hoping that you, Honey, would be a great addition to GRS. A getting out of debt success story like J.D perhaps. In your comments, all I see are excuses and reasons why our advise is not good enough.

I give up.

loading....

255

Lincolnsays:

03 August 2012 at 3:33 am

There is certainly a disconnect between the life Honey seems to want and the life she currently has. On one hand, she is highly educated Ph.D., member of Mensa, and is married to a lawyer. On the other hand, despite her education and privilege, she seems to be floundering. Part of me wonders if it’s an elaborate gimmick for attention, but then I think not. She’s just bought into a completely distorted vision of herself as a “success,” that I think prevents her from critically evaluating her own mistakes, including that she doesn’t seem to realize that she’s an enabler.

loading....

310

Allysonsays:

04 August 2012 at 6:34 am

If you and your husband are so smart, why are you asking all of us dummies for advice? Figure out how to solve your own problems.

Honey, I’m tempted to say that I am shocked by the stupidity of your comment, but then I remember all the foolish Internet remarks that haunt celebrities. If stupid, you are not alone.

Regardless of how serious a faux pas that was…. if you believe that your IQ makes you smarter than 98% of people, then you are a damn fool. Whether a joke or not, your choice to make that comment seriously lowers you in the estimation of readers here.

And for you, it should serve as empirical proof that intelligence isn’t just about IQ.

Advertiser Disclosure:
Many of the savings offers appearing on this site are from advertisers from which this website receives compensation for being listed here.
This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). These offers do not represent all deposit accounts available.
Editorial Disclosure: This content is not provided or commissioned by the bank advertiser.
Opinions expressed here are author’s alone, not those of the bank advertiser, and have not been reviewed, approved or otherwise endorsed by the bank advertiser. This site may be compensated through the bank advertiser Affiliate Program.
UGC Disclosure: These responses are not provided or commissioned by the bank advertiser.
Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.

Disclaimer: Rates / APY terms above are current as of the date indicated. These quotes are
from banks, credit unions and thrifts, some of which have paid for a link to
their website. Bank, thrift and credit union deposits are insured by the FDIC
or NCUA. Contact the bank for the terms and conditions that may apply to you.
Rates are subject to change without notice and may not be the same at all
branches.

Disclaimer:All information provided on this site is for informational purposes only. GetRichSlowly.org makes no representations as to the accuracy, completeness, suitability or validity of any information on this site and will not be liable for any errors or omissions in this information or any damages arising from its display or use.